Peter Schiff’s Fed’s onetime bubble view

Peter Schiff’s Fed’s one time bubble view is based on his long standing view that we are near the endgame and Trump’s gonna be the fall-guy.

Peter Schiff CEO and chief global strategist of Euro Pacific Capital Inc believes that the Fed is going to take interest rates back to zero and launch another round of quantitative easing (QE) to inflate the bubble economy after the next crash.

“Peter Schiff’s Fed’s one time bubble view is based on his long standing view that we are near the endgame and Trump’s gonna be the fall-guy”

The crux to Peter Schiff’s Fed’s one time bubble is based on the world’s central bank, successfully propping up asset prices post 2008 financial crisis by embarking on an unprecedented monetary easing policy

In the post-2008 financial crisis-era, the Fed in cahoots with its other western aligned central banks the BoE, BoJ and the ECB lowering base rates to zero and in some cases negative interest-rate policy NIRP was implemented. Moreover, nearly a decade of quantitative easing QE which entailed three rounds of asset purchases amounting to over 4 trillion dollars and spanning a decade to keep asset prices inflated was also implemented by the Fed.

Peter Schiff’s Fed’s one time bubble view explains why the Fed can’t do QE to infinity

Further monetary easing, particularly QE will tank the US dollar and lead to an inflationary recession, according to Peter Schiff. But with the US dollar nearing its all-time high, a depreciation in the world’s reserve currency would help to make US dollar interest payments on international loans more affordable and thereby reduce default risk. Moreover, US exports would become more competitively priced in international markets with a softer dollar. So the US dollar, already appreciated, has enough recoil to cushion the depreciating impact of QE4 on the currency.

“Peter Schiff’s Fed’s one time bubble view explains why the Fed can’t do QE to infinity”

QE4 could depreciate the US dollar, which would be a desirable consequence.

So a dollar collapse based on more QE isn’t a watertight view. Today the US dollar is as strong as an ox, it can pull another round of QE, lose 10% of its value and it would still be strong against the major fiat currencies based on historic prices. But when you compare the exchange value of the US dollar against gold, what Peter Schiff refers to as true money, then maybe he has a case. That is why gold is rigged to the downside in a fiat ruled world.

“The next round of quantitative easing is going to have to be much, much bigger than the last one. They may have to do two or three hundred billion of QE every month as opposed to 85 billion” – Peter Schiff

Peter Schiff’s Fed’s one time bubble view suggests that betting on the Fed to inflate the bubble in the next crisis is losing one

In the bubble of everything era, Peter Schiff believes that the next crisis will be too big for the Fed to come to the rescue. “The next round of quantitative easing is going to have to be much, much bigger than the last one. They may have to do two or three hundred billion of QE every month as opposed to 85 billion. And when they were doing it before, we had a lot of support” said Peter Schiff. “I don’t see that kind of appetite for US debt anymore” he added.

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